ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Politics

Taiwan tightens screening of tech investment in mainland China

Taipei aims to protect chip design know-how from Beijing by reviewing proposals

A semiconductor factory in Beijing: China courts Taiwanese investment in the mainland tech sector by offering tax and other incentives.   © Reuters

TAIPEI -- Taiwan will screen proposals of chipmakers and other tech companies seeking to invest in mainland China, taking another step to prevent Beijing's appropriation of sensitive technology in such areas as chip design.

All investment plans involving tech transfers will be reviewed beforehand under the revised regulations, which will take effect in about two months. Companies had previously been permitted to submit filings after making such investments.

Restrictions on high technology have changed globally in recent years, a representative from the Ministry of Economic Affairs' Investment Commission told Nikkei.

"We, too, must strengthen regulations and institute effective controls," the representative said.

The specter of Taiwanese technology falling into Beijing's hands, either through joint ventures or technological tie-ups with mainland enterprises, has emerged as a hot-button issue.

President Tsai Ing-wen's government has aligned itself with the U.S. in applying further pressure against China. Just last week, Taiwanese officials unfurled tighter rules for screening Chinese investments on the island.

Washington has moved to essentially block Chinese telecommunications company Huawei Technologies from procuring chips based on American technology. The new investment controls by Taiwan would amplify the blow delivered by the U.S.

The island is home to chipmaking behemoth Taiwan Semiconductor Manufacturing Co. along with MediaTek, Taiwan's largest chip designer and developer. Numerous small and midsize chip design outfits, founded by veterans of larger companies, populate Taiwan as well.

MediaTek, which counts Huawei as a key customer, told Nikkei on Friday that it has submitted license applications to the U.S. government in order to continue supplying the Chinese company after the latest regulations take effect on Sept. 14. MediaTek did not specify, however, which chip products are covered in its license applications.

China, which is lacking in native semiconductor technology, has long approached Taiwan with an eye on gaining access to the tech sector. Ma Ying-jeou, the former China-friendly president of Taiwan, responded to Beijing's lobbying in 2010 by removing chip design from a list of items in which mainland investment was banned.

China has aggressively offered tax and other incentives for Taiwanese corporations to invest across the strait. At least 3,000 Taiwanese chip engineers have taken positions in Chinese companies since 2015, the year Beijing launched the "Made in China 2025" initiative for technological self-sufficiency.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media